For discussion
on 20 January 1999



Law and Order - Police

234LP -Redevelopment of Police Headquarters, Arsenal Street, Wanchai
(Arsenal Yard Phase 3 development)
    Members are invited to recommend to Finance Committee -

  1. the upgrading of part of 234LP, entitled "Redevelopment of Police Headquarters, Arsenal Street, Wanchai (Arsenal Yard Phase 3 development) - stage 1" to Category A at an estimated cost of $45.1 million in money-of-the-day prices; and

  2. the retention of the remainder of 234LP in Category B, retitled "Redevelopment of Police Headquarters, Arsenal Street, Wanchai, (Arsenal Yard Phase 3 development) - stage 2".


The Police Headquarters (PHQ) site and the Wanchai Police Station site are under-developed by today's standards. In addition, the existing premises cannot meet the Police's present and projected demand for office accommodation and operational facilities. To address this problem, we intend to redevelop the existing PHQ site to provide a new complex capable of meeting the projected accommodation requirements, including a new Wanchai Police Station. Owing to a lack of sufficient in-house staff resources and expertise in some areas, we need to engage consultants to undertake certain aspects of the detailed design and drafting services for the new complex.


2. The Director of Architectural Services (D Arch S), with the support of the Secretary for Security (S for S), proposes to upgrade part of 234LP to Category A at an estimated cost of $45.1 million in money-of-the-day (MOD) prices for the stage 1 works (see paragraphs 4(a)(i) to (iii) below) of the redevelopment of PHQ, Arsenal Street, Wanchai (Arsenal Yard Phase 3 development).


3. The Arsenal Yard Phase 3 development, comprising the two stages described in paragraph 4 below, will provide accommodation to replace May House and Caine House in PHQ, the existing Wanchai District Headquarters and Divisional Police Station, and leased accommodation in Wanchai and Tsim Sha Tsui areas currently occupied by other PHQ units.

4. The project will be implemented in two stages. The works include the following -

  1. Stage 1 - preparatory works
    1. demolition of May House and associated services buildings/structures, including an emergency generator room, a transformer room, an underground oil storage tank and car wash facility;

    2. reprovisioning of the transformer room, workshops and the underground oil storage tank; and

    3. consultancy services, including detailed design.

  2. Stage 2 - main works
  3. Stage 2 of the project includes works on the piled foundation together with construction of a four-level basement structure and an integrated complex consisting of the following -

    1. a high-rise office tower to accommodate the PHQ units, including the senior directorate;

    2. a Wanchai District Headquarters and Divisional Police Station; and

    3. support facilities including a carpark, a ceremonial area, an auditorium, a multi-purpose hall, dining and canteen facilities, a library, an armoury and an indoor firing range.

5. The part of the project under 234LP that we now propose to upgrade to Category A is the stage 1 works described in paragraph 4(a) above which must be completed before the stage 2 main works can begin.


6. The existing PHQ Complex located at Arsenal Street, Wanchai consists of four buildings, namely Caine House, May House, Arsenal House and Arsenal House West Wing. The site was allocated to the Police Force in the 1950's. Caine House was built in 1952 while May House was completed in 1973-74. Arsenal House and Arsenal House West Wing were completed in 1990 and 1996 respectively.

7. May House is a 20-storey building. Most of the fire services and building services installations including the electrical, air-conditioning and lift systems are aging and need to be replaced. The Hong Kong Police Force (the Force) submitted a proposal to refurbish May House at an estimated cost of $230.8 million in MOD prices to the Public Works Sub-Committee on 23 April 1997. The Sub-Committee, however, considered that the proposal would not be the most cost-effective option and asked the Administration to consider a long-term redevelopment plan for the PHQ site.

8. We have carefully considered various options for redeveloping the PHQ site. Retaining May House will incur high refurbishment costs and will substantially compromise the potential for further redevelopment. Redeveloping Arsenal House and Arsenal House West Wing would not be appropriate as the facilities have been newly built and are functioning to requirements. After careful consideration, we consider that the most viable and cost-effective option is to demolish May House and redevelop the site together with the external car parking area into a new complex.

9. To fully optimise the development potential of the available space, we also propose to include a new Wanchai District Headquarters and Divisional Station in the proposed redevelopment. This would significantly enhance the cost-effectiveness of the project. The existing Wanchai District Headquarters and Divisional Station on Gloucester Road was built in 1932. The station complex also incorporates 40 Junior Police Officers married quarters. The facilities and building services installations are not up to standard and cannot meet present day operational requirements. Due to their age, the buildings are very expensive to maintain. Furthermore, the outdated design of the buildings has restricted the utilisation of the site. There is no room for further expansion to meet increasing demand for operational space. Locating the station within Arsenal Yard can release the Gloucester Road site while obviating the need to find a reprovisioning site in other areas in Wanchai. The Police will arrange for decanting the quarters which do not require direct reprovisioning under this project.

10. The redevelopment site (approximately 7 400 square metres) is currently occupied by May House and an external car parking area. The proposed facilities will have a gross floor area of approximately 110 000 square metres. It will achieve a plot ratio of 15 which is the maximum permissible plot ratio of private developments in the area.

11. This proposal is cost effective and will bring about major benefits as set out below -

  1. the new complex will replace three existing buildings, namely May House, Caine House and Wanchai District Headquarters and Divisional Station, which are costly to maintain and the sites of which are under-utilised;

  2. there will be rental savings of about $33.5 million a year as PHQ units now located in leased premises in Wanchai and Tsim Sha Tsui will be accommodated in the new complex;

  3. upon completion of the project, part of the Caine House site and the whole of the Wanchai District Headquarters and Divisional Station and Quarters site, which is more than 7 800 square metres in size, can be relinquished to government; and

  4. the new complex will provide an operationally efficient and cost-effective facility for the Force. Facilities and support services can be shared among different units/formations accommodated in the complex. The new building will be fitted out in accordance with the prevailing standard of a modern Police station and offices and will meet the current operational requirements, including that of modern information technology. Its design will also keep up with the current needs to conserve energy and minimise recurrent maintenance cost.

12. We will engage contractors to carry out site works, reprovisioning works and demolition works. As D Arch S does not have adequate in-house staff resources and expertise in some areas, we propose to engage consultants to undertake certain aspects of the detailed design, drafting services and site supervision for asbestos abatement works of the proposed project.


13. We estimate the total capital cost of the Arsenal Yard Phase 3 development to be approximately $2.755 billion at December 1997 prices. The capital cost of stage 1 works, estimated to be $45.1 million in MOD prices (see paragraph 14 below), is made up as follows -

$ million
(a) Site works1.4
(b) Reprovisioning works10.0
(c) Demolition works15.2
(d) Consultants fees for8.7
    (i) detailed design
    (ii) drafting services
    (iii) site supervision for asbestos abatement works
(e) Contingencies3.6
Sub-total38.9(at December
1997 prices)
(f) Provision for price adjustment6.2
(in MOD prices)

A breakdown by man months of the cost estimate for consultants’ fees is at Enclosure 1.

14. Subject to approval, we will phase the expenditure as follows -

Year$ million
(Dec 1997)
$ million
1999 - 200021.71.1289024.5
2000 - 0117.21.1966320.6
_____ _____
_____ _____

15. We derived the MOD prices on the basis of Government's latest forecast of trend labour and construction prices for the period 1999 to 2001. We will award the contract on a fixed price lump-sum basis because we can clearly define the scope of works in advance, leaving little uncertainty. The contract will not provide for price fluctuation adjustment because the contract period will not be more than 12 months.

16. Stage 1 of the project which involves consultancy services, demolition and reprovisioning work only, does not give rise to any recurrent costs.


17. We consulted the Wan Chai Provisional District Board in July 1998. Members of the Board noted the project and raised no objections.

18. We briefed the Legislative Council Panel on Security on the proposed project on 13 October 1998 and have considered concerns raised by Panel Members at the meeting in detail. In response to a suggestion from Members, we have further examined the viability of trimming down the budget of this project while accommodating the operational needs of the Force. The estimated cost of the project was based on the estimated costs of previously built government buildings of a similar nature. A comparison of the building and building services costs for this project and other contemporary government office buildings, namely the Cheung Sha Wan Government Offices Building and the North Point Government Offices Building is at Enclosure 2. We have reviewed the estimated cost of the project and the possibility of revising the project scope. We are of the opinion that any trimming down of the budget at the present moment might involve reducing the specification below the required operational standards. Reducing the project scope will not achieve the benefits gained by relocating the Wanchai Police Station and other leased premises at the new complex. We will monitor the situation closely and will review the estimated cost for the stage 2 works when we have more information on the final plans and specifications which will be developed during the detailed design stage of the project. We will exercise our professional judgement and keep a tight control on the estimate and expenditure of the project when we upgrade the stage 2 works to Category A which is scheduled for early 2000.

19. We are considering Members’ suggestion of providing parking facilities in the proposed redevelopment for members of the public, in the light of the need to ensure a user friendly environment and the requirement to maintain security. The number of parking spaces for public use will be finalised during the detailed design stage.


20. D Arch S completed a Preliminary Environmental Review (PER) of the project in January 1998 and concluded that the project would have no long term environmental impact. The Director of Environmental Protection vetted the PER and agreed that an Environmental Impact Assessment would not be necessary. However, the PER has identified the likelihood of asbestos materials being present in the existing building. D Arch S will therefore engage consultants to assess the likely disturbance of asbestos containing material (ACM) during the demolition works in May House and the associated services buildings. Any ACM will be disposed of prior to the commencement of the demolition works in strict compliance with relevant statutory requirements, codes of practice and guidelines. As the project also involves the removal of underground fuel tanks, D Arch S will conduct soil sampling at the site prior to construction to identify any land contamination. He will control noise, dust and site run-off nuisances demolition through the implementation of appropriate mitigation measures in the relevant works contracts.


21. The project does not require land acquisition.


22. We upgraded 234LP to Category B in September 1998. We plan to start the stage 1 works in May 1999 for completion in June 2000. We plan to start the stage 2 works of 234LP in June 2000 for completion in January 2004.

23. The proposed Arsenal Yard Phase 3 development has an achieved plot ratio of 15. We consider that the project has maximised the development potential of the site.

Security Bureau
January 1999

Enclosure 1 to PWSC(98-99)59

234LP - Redevelopment of Police Headquarters, Arsenal Street,
Wanchai (Arsenal Yard Phase 3 development)


Breakdown of estimates for consultants’ fees

Category of
($ million)
(I) Detailed design

(a) Civil engineering discipline Professional
Traffic consultant Professional 2.8 40 2.4 0.4
Facade engineering Professional
Security consultant Professional

(II) Drafting services

(a) Structural engineering discipline Technical37.8162.41.8
(b) Architectural discipline Technical 42.0 16 2.4 2.0
(c) Building services discipline Technical 21.0 16 2.4 1.0
Sub-total 4.8

(III) Site supervision for asbestos abatement works
(a) Architectural discipline Professional 1.0 40 1.7 0.1
Total consultants staff costs8.7

* MPS = Master Pay Scale


1. A multiplier factor of 2.4 is applied to the average MPS point to arrive at the full staff costs including the consultant's overheads and profit, as the staff will be employed in the consultant's offices (At 1.4.1997, MPS pt. 40 = $59,210 p.m. and MPS pt. 16 = $19,860 p.m.). A multiplier factor of 1.7 is applied in the case of site staff supplied by the consultants.

2. The figures given above are based on the estimates prepared by the Director of Architectural Services. We will only know the actual man months and fees when we have selected the consultants through the usual competitive bidding system.


>Enclosure 2 to PWSC(98-99)59

234LP - Redevelopment of Police Headquarters, Arsenal Street,
Wanchai (Arsenal Yard Phase 3 development)

A comparison of the building and building services costs of 234LP
with two contemporary Government office buildings of a similar nature

(at TPI 1051)
Building Services Cost
(at TPI 1051)
Building Cost
(at TPI 1051)
Unit cost
Cheung Sha Wan Government Offices Building 753,547,000 439,517,000 1,193,064,000 78 603 15,178.35
(adjusted cost)
with 31/2 level basement
North Point Government Offices Building 766,545,000 430,146,000 1,196,691,000 74 933 15,970.15
(adjusted cost)
with 11/2 level basement
Police Headquarters Phase III development 1,412,429,000 783,152,000 2,195,581,000 135 500* 16,203.55
(estimated cost)
with 4 level basement

* Approximate figure


TPI : Tender price index
CFA : Construction floor area